Buying low, flying high

14

In recent years, Delta has improved their flying experience quite a bit.  They’ve upgraded to newer and bigger planes, they’ve improved their on time performance and baggage handling, they’ve upgraded their onboard catering, and they’ve even produced some of the most entertaining safety videos around, such as this 80’s themed video:

 

Unfortunately, along the way, Delta has also done a lot to tick off frequent flyers.  Here are some examples:

  • They raised prices in their award chart twice in 2014
  • They cut mileage earning on certain partners
  • They introduced revenue requirements for earning elite status (Medallion Qualifying Dollars)
  • They cut the ability to bring friends or family members into SkyClubs except for those who subscribe to the most expensive plan
  • They made their same day confirmed change policy much less customer friendly (due to now requiring same fare class availability)
  • They took away the possibility of complimentary elite upgrades for certain transcon routes
  • They shortened the elite membership year (elite status earned in 2014 for 2015 now ends at the end of January 2016 rather than February)

And, most concerning of all to many:

  • They changed from a miles-based to a fare-based scheme for earning miles on paid flights.

Rapid Travel Chai summed it all up in his post: Delta Strives to be the Worst Airline for Business Travelers.  

Running to the competition

Several people I’ve spoken with, who previously held elite status with Delta, have defected to American Airlines or Alaska Airlines.  Those choices make a lot of sense.  Their miles are worth more for international travel and their loyalty programs are more customer friendly (especially for elites) than Delta’s. 

The risk of fleeing to the competition, of course, is that the other airlines will follow suit and race Delta to the bottom.  In fact, American Airlines has already sprung big changes upon their members such as:

  • Elimination of OneWorld Explorer awards
  • Elimination of free stopovers at gateway cities on award tickets
  • Increased AAnytime award pricing

These are significant changes and are particularly painful to those who were planning to use these options.  You can read more about the above changes at One Mile at a Time.

More for the rest of us

While the analogy is far from perfect, frequent flyers’ defection from Delta reminds me of the way people tend to sell stock shares when the market tumbles.  For fear of losing even more, people often sell low rather than adhering to the age old advice to buy low, sell high. 

As Delta implements their mixed bag of “improvements” and people flee to other carriers, I think those of us who stick with Delta will likely have better experiences:

  • As the number of high level elites goes down, the odds of scoring free Medallion upgrades should increase.
  • As people earn fewer miles (due to defections and to the new revenue based earning scheme), competition for award flights should decrease and therefore saver level awards should be easier to get.
  • SkyClubs should be less crowded.

Credit cards vs flights

For those who earn miles primarily from travel, sticking with Delta might be a bad move.  If your flights tend to be far and cheap, Delta’s switch to revenue based mile earnings will mean that you’ll earn fewer miles than before as of January 1st 2015. Those who typically fly expensive, short flights, though, will earn more miles.  And, those who earn miles primarily through credit card spend will be mostly unaffected.  In fact, Delta’s revenue requirements for earning elite status are waived for anyone who spends $25,000 or more on a Delta branded credit card.  And, the Delta Platinum and Reserve credit cards continue to offer both bonus miles and MQMs (needed for elite status) with high spend.  Delta is the only major airline in which it is possible to achieve top tier elite status from credit card spend alone.

As a Delta hub captive, it has already made sense for me to use Delta branded credit cards to earn miles and elite status, and I’ve done so for quite a few years.  With the latest round of changes, I actually think that it makes more sense than ever.  With potentially fewer elites to compete with and fewer miles in circulation, I expect that both my elite status and SkyMiles will be worth more.

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